Telegraph, LLs losing money each month in ten out of 11 British regions

Garethgrew

Including London....http://moneyweek.com/merryns-blog/britons-just-wont-give-up-on-buy-to-let-but-they-really-should/

How on earth can anybody still think BTL is a good idea?

Carl31

Not that i am a fan of BTL, but that article says they will be losing out, not that they are at the moment. I find it hard to believe that any rental place is losing money with the amounts some are charging

Still, its all making a rod for their own back

chucknorris

Garethgrew wrote: »

Including London....http://moneyweek.com/merryns-blog/britons-just-wont-give-up-on-buy-to-let-but-they-really-should/

How on earth can anybody still think BTL is a good idea?

As a sole trader, starting out highly geared it isn't a good idea, as I have said before:

chucknorris wrote: »

the day after the budget changes were announced I looked at the first couple of properties that I bought, and re-ran the figures applying the new post budget tax rules. When I first bought I was only covering costs and showing a very small profit, but I was content with that, because I was investing for the long term. But with the new tax rules, there is no way that I would (or could) have taken on those initial losses, in not only the first year, but quite a few more subsequent years before breaking even. It definitely is a 'game changer' for new entrants (and highly geared current landlords), it will also be interesting to see what happens to rents.

But it is a different story for existing landlords that are not geared too highly, and it might also be for a new limited company just starting out too.

Garethgrew

It's only talking bout those with large mortgages,

If you don't have a mortgage the tax changed aren't too bad for you

mayonnaise

Duplicate thread.

https://forums.moneysavingexpert.com/discussion/5390715

Mods, please merge. Thanks.

Generali

FWIW The Economist wrote a piece in 2004/5 about long term investments in various assets. The best performer was equities, then bonds. Bottom? BTL with long term negative returns.

There are so many problems with BTL from an investment theory POV it's hard to know where to start: lack of liquidity (try selling a house in a hurry let alone with 3 day settlement as is normal for a share or bond), concentration risk (eggs in one basket risk), risk of losses beyond what you put in initially (equities can't go below zero but a house can be worth less than the mortgage). In addition the CEO of Barclays isn't going to call you on Xmas Eve because the boiler is bust and he's not going to do a poo on the floor of your kitchen because you did nothing about it.

People have made substantial sums from BTL but I really don't see it as an investment. A business yes, an investment no.

Garethgrew

mayonnaise wrote: »

Duplicate thread.

https://forums.moneysavingexpert.com/discussion/5390715

Mods, please merge. Thanks.

This is actually more about the money week article

There is room for both threads

Generali

Garethgrew wrote: »

This is actually more about the money week article

There is room for both threads

Money Weak is normally a pretty good counter indicator. If they want you out of an asset class then it's often a great time to buy.

Garethgrew

Seems that if Mr Osborne wants to put people off relying on the UK property market to solve all problems, he has a little more work to do.

And this is the way things will go, more taxes from greedy property owners.

chucknorris

Garethgrew wrote: »

It's only talking bout those with large mortgages,

If you don't have a mortgage the tax changed aren't too bad for you

At these low rates we end up paying much more tax because of the withdrawal of the wear and tear allowance, rather than the forthcoming changes to claiming mortgage interest (and I mean even if the mortgage interest changes had been introduced fully at the same time). Nobody ever seems to mention this though, from my point of view, we had a great run with it, so I can't complain, nothing lasts forever.

It is very fortunate for those highly leveraged that the base rate is low at the moment and that they are being phased in over 4 years, although that was obviously a factor that the chancellor considered when making his decision.

cells

Generali wrote: »

FWIW The Economist wrote a piece in 2004/5 about long term investments in various assets. The best performer was equities, then bonds. Bottom? BTL with long term negative returns.

depends on the market invested in

stoke-on-trent is cheaper now in real terms than it was 20 years ago even 25 years ago.

whereas on the other extreme inner London has done very well over the last 20 years